Unpaid Overtime Wages, Orange County Attorneys

Author: George Bean

The pressure for employers to keep their costs down is very strong in California. Unfortunately, one method employers use to cut costs is to underpay their employees in various ways. One such tactic is to neglect paying daily overtime. This can be a little tricky because an employer may appear to be in compliance with the Labor Code (Section 510) by paying weekly overtime, but employees may still be getting shorted on their daily overtime.

Consider this example: Employee works 10 hours on Monday through Thursday and 4 hours on Friday, for a total weekly hours of 44. Many employers simply pay 40 hours at straight time and 4 hours of overtime. But that does not comply with California Law. The employer actually owes the employee 8 hours of overtime pay. Each hour over 8 in one workday is subject to overtime pay. See Labor Code 510.

It is possible to have an “alternative workweek” schedule which allows for up to 10-hour days, without payment of overtime, but that type of arrangement must be approved by 2/3 of the employees by secret ballot. If an employer has instituted an alternative work schedule to avoid paying daily overtime, but has not taken the steps required by Labor Code 511, they are in violation of law.

If you feel this may have happened in your workplace, contact George Bean Law at 714-904-9338.

Recent cases have made it clear that non-exempt workers such as auto mechanics must get paid at least minimum wage for every hour they work. If a mechanic gets paid for six flag hours, but works for eight hours, he or she must get paid at least minimum wage for the extra two hours of non-flag hours worked. This is different from Federal law, which simply divides the total hours worked into gross earnings and if the result is more than minimum wage, it is lawful.

The Court of Appeal has published a new decision, Vaquero v. Stoneledge Furniture, which holds that commissioned employees must get paid separately for rest periods. Under California law, a worker, including an inside sales person, is entitled to a paid rest period of ten (10) minutes per four (4) hours of work. Typically a commissioned salesperson is exempt from overtime provisions, but not rest period provisions, if they are paid enough to equal one-and-one-half times minimum wage and at least half of their earnings are from commission. But when an auto dealer calculates an employees wages, by whatever method, if they do not separately account for payment of rest periods, they are now have been found to be in violation of California law. The penalties can add up because an employer owes every worker one hour or pay for each day that a rest period is missed. Interest, attorneys fees and penalties can make the punishment even worse for a violator.

This has resulted in new complicated methods of pay for auto salesmen. Many dealers do not want to lose the incentive based nature of commission pay, but the new laws have auto dealers twisted into pretzels to maintain commission motivations for their sales force while complying with the labor laws in California.

If you feel you are not being compensated correctly by your employer, call George Bean Law at 714-904-9338.

Many industries struggle with California Labor Law. The Legislature has enacted a large amount of legislation and many employers do not keep abreast of new laws, and many fail to implement policies to remain compliant. One such recent development comes from the California Supreme Court. In a 2016 case, (Augustus v. ABM Security Services, Inc., 2 Cal.5th 257) the high court ruled that “on call” rest breaks do no satisfy an employer’s obligation to provide uninterrupted free time when security guards are on break. Because the guards were required to respond to radio calls and remain vigilant during their rest breaks, it was found that they did not receive the required breaks. Courts continue to attempt to define what is, and what is not, a rest break in California, but the Augustus case has dealt a serious blow to any employer who maintains any type of control over their employees while they are on break.

If you have a question about your potential employment matter, call the office of George Bean Law at 714-904-9338.

California Labor Code Section 510 provides that any work in excess of eight (8) hours in one workday and any work in excess of 40 hours in one workweek must be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee. If you work in excess of 12 hours in one day, you should be getting paid double-time. Many employers want to avoid paying overtime, of course.

One common scenario is this: Your employer schedules you for a nine (9) hour shift, which includes a one-hour lunch break. But it gets busy and you don’t take your full one-hour lunch break. Maybe your employer pays you for the extra time worked, maybe they don’t pay you at all. Either way, you may have been shorted some overtime pay, or even minimum wage. Even if they pay you for the extra time worked at your regular rate they are in violation of the Labor Code because you worked over eight (8) hours, and should be getting paid at overtime rates for that time.

Moreover, if you don’t get paid at all for extra hours worked, your employer is in violation of Labor Code 1194, which requires compensation of at least minimum wage for all hours worked. If this is the case, you may recover all of your unpaid wages, PLUS a liquidated damages penalty equal to the amount of unpaid minimum wages.

There are two main categories of retaliation that occur in California. The first happens when you assert a right related to a protected category and your employer retaliates against you for doing so. FEHA lists California’s protected categories, which include race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. See Government Code § 12940(a). If an employee is discharged or otherwise suffers an adverse employment action (denied a promotion, demoted, etc.) because they opposed a practice of their employer that violated rights under FEHA, including filing a complaint or testifying in any proceeding brought under FEHA, they have suffered unlawful retaliation. TheDepartment of Fair Employment and Housing maintains the authority to investigate complaints of discrimination in the area of employment. The National Labor Relations Board investigates complaints of the unfair labor practices by employers and unions.

The second main category of retaliation in California occurs when the employer retaliates against an employee who discloses information to a government or law enforcement agency OR to a person with authority over the employee, or to another employee who has the authority to investigate. See California Labor Code § 1102.5. If you employer takes adverse action against you because you have disclosed information, as described above, they have unlawfully retaliated against you. Call the Law Offices of George Bean at 714-904-9338.

There are many other laws that prohibit retaliation and discrimination in California when the employee engages in certain activity. A few examples are: Filing a claim with the Labor Commissioner, taking time off for jury duty, taking time off to obtain help related to being a victim of domestic violence, time off to perform emergency duty as a volunteer firefighter, time off for parents to appear at their child’s school at the request of their teacher and many others. Also, an employer cannot report or threaten to report an employee’s (or a family member’s) citizenship or immigration status because they exercise a right under the Labor Code, the Government Code or the Civil Code. An employee who believes she or he has been denied reasonable accommodation to enroll and participate in an adult literacy education program may file a retaliation complaint with the Labor Commissioner’s office.

Many employers have classified certain of their employees as exempt from the overtime provisions of the California Labor Code. However, an employer’s designation is not the determining factor as to whether that employee is entitled to overtime pay. First the exempt employee’s salary must be at least twice the minimum wage. Second, the employee will only be properly exempt if their duties qualify for exempt status and only if they spend more that 50% of their time performing exempt duties.

If an employee spends more than 50% of their time managing the business, meaning they exercise discretion and independent judgment, direct the work of more than one other employee, and they can hire and fire and promote employees, they may qualify for the executive exemption.

The professional exemption is for those employees who are licensed or certified by the State of California and primarily engaged in the practice of
law, medicine, dentistry, optometry, architecture, teaching, accounting or in a “learned” or “artistic” profession.

This is where a lot of the trouble is. An employee may qualify for this exemption if they perform office work or non-manual work that is directly related to managing the business. The employee must exercise discretion and independent judgment on a regular basis. This exemption also includes a worker who performs, under only general supervision, work along specialized or technical lines requiring special training, experience, or knowledge. These workers must beprimarily engaged in duties which meet the test for the exemption.

If you have been misclassifed, you may be entitled to back overtime, call the attorneys at George Bean Law at 714-904-9338.

Following are examples of employees who might qualify for the administrative exemption:

Employees who regularly and directly assist a proprietor or exempt executive or administrator. Included in this category are those executive assistants and administrative assistants to whom executives or high-level administrators have delegated part of their discretionary powers. Generally, such assistants are found in large establishments where the official assisted has duties of such scope and which require so much attention that the work of personal scrutiny, correspondence and interviews must be delegated.

Employees who perform, only under general supervision, work along specialized or technical lines requiring special training, experience or knowledge. Such employees are often described as “staff employees,” or functional, rather than department heads. They include employees who act as advisory specialists to management, or to the employer’s customers. Typical examples are tax experts, insurance experts, sales research experts, wage rate analysts, foreign exchange consultants, and statisticians.

Employees who perform special assignments under only general supervision. Often, such employees perform their work away from the employer’s place of business. Typical titles of such persons are buyers, field representatives, and location managers for motion picture companies.

Perhaps the most common misapplication is the application of the exemption to employees engaged in production aspects of the employer’s business as opposed to administrative functions.

Caveat. As with any of the exemptions, job titles reflecting administrative classifications alone may not reflect actual job duties and therefore, are of no assistance in determining exempt or nonexempt status. The fact that an employee may have one of the job titles listed above is, in and of itself, of no consequence. The actual determination of exempt or nonexempt status must be based on the nature of the actual work performed by the individual employee.

Employers have often misclassified clerks and secretaries and have later been subject to lawsuits for unpaid overtime and the penalties that come with that. If you have been misclassifed, you may be entitled to back overtime, call the attorneys at George Bean Law at 714-904-9338.

Labor Code Section 510 requires that employees get paid one and one-half times their regular rate of pay for all hours worked in excess of 8 in one day or 40 in a work week. If you are an auto mechanic, you probably get paid for all hours that you “flag” while working on automobiles. But, did you know that your employer must also pay you minimum wage, or more, for the other hours that you work? Just because your employer can take your flag hours and divide it by your total hours worked and come up with an hourly rate above minimum wage, does not mean they are paying you correctly.

A 2013 California appellate court case, Gonzalez v. Downtown LA Motors, clarified that employers must separately calculate an employees non-flag hours and pay at least minimum wage for all those hours. For example, if you are cleaning up the shop or waiting for a vehicle to repair, those hours are separate from your flag hours, and must be paid in addition to your flag hours.

This also means, that if you work more than 8 hours, whether flagging or not, you must be paid at least one and one-half times your regular rate of pay for those hours. Your regular rate of pay can be calculated in one of two ways:

The piece or commission rate is used as the regular rate and you are paid one and one-half this rate for production during the first four overtime hours in a workday, and double time for all hours worked beyond 12 in a workday; or

Divide your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours. For each overtime hour worked you are entitled to an additional one-half the regular rate for hours requiring time and one-half, and to the full rate for hours requiring double time.

If your employer owes you wages, whether minimum wages or overtime wages, call the unpaid overtime specialists at George Bean Law at 714-904-9338.

Most people believe the minimum wage is $10.00 per hour in California. That is only true for employers with 25 or fewer employees. If an employer has 26 or more employees, they must pay them at least $10.50 per hour. Further, if an employee works more than 8 hours in one day, or more than 40 hours in one work week, the employer must pay them one-and-a-half times their regular wage for those hours. Some employees can be exempt from overtime laws, but employers must be careful not to mis-classify employees, because the penalties can be severe.

The Labor Commissioner has published a minimum wage supplement for employers to post next to their applicable IWC Wage Orders.

Contact the attorneys at George Bean Law if you have not been paid all of your rightful minimum wages or overtime wages. 714-904-9338.

Just for fun, did you know that California’s minimum wage started at $0.16 per hour in 1916. It took 41 years to get to $1.00 per hour in 1957 and another 17 years to hit $2.00 per hour in 1974. The largest gross increases were recent with a full $1.00 increase taking effect on July 1, 2014 and January 1, 2016 when it reached its current level of $10.00 per hour.